Technology Review (02/01/12) David Talbot

While economic output in the U.S. is higher today than it was before the financial crisis, 6.3 million fewer Americans have jobs than was true at the end of 2007. Several factors, including outsourcing, explain the state of the labor market, but fast-advancing, IT-driven automation might be playing the biggest role. New research indicates that advances in workplace automation are being deployed at a faster pace than ever, making it more difficult for workers to adapt and wreaking havoc on such middle-class occupations as clerks, accountants, and production-line workers.

David Autor, an economist at MIT, and David Dorn, an economist at the Center for Monetary and Financial Studies in Madrid, cite the time period of 2000–2005, when job growth occurred mainly at the ends of the spectrum—in lower-paying positions, in areas such as personal care, cleaning services, and security, and in higher-end professional positions for technicians, managers, and the like. For administrative assistants, production workers, and sales representatives, the job market did not grow as fast, or even declined. Subsequent research showed that things got worse after 2007, and during the recession, nearly all the nation’s job losses were in those middle categories—the positions easiest to replace, fully or in part, by technology.

Unless the economy generates new high-quality jobs, the risk is that the people in the middle will face the prospect of menial jobs with declining wages. “Theory says the labor market will ‘clear.’ There are always things for people to do,” Autor says. “But it doesn’t say at what price.” Experts say there currently are not enough people sufficiently educated to exploit the rapid advances in technology.